Lawsuits plague Putnam County Hospital

The troubles of Putnam County Hospital in Unionville continue to mount.

In the past three weeks, the hospital has become embroiled in two lawsuits, one state and one federal.

On April 3, 2018, Hospital Partners Inc. (HPI), controlled by Jorge Perez, sued the hospital’s board and the Missouri State Auditor’s Office in state court.

Perez alleges he has been illegally removed from running the hospital that he has the legal right to operate.

The hospital was in poor financial shape when HPI entered into a management agreement with the board in the fall of 2016.

At that time, HPI was run by Perez and David Byrns. Perez has since taken over sole responsibility for HPI.

But the trouble really began in August 2017, when Missouri State Auditor Nicole Galloway released a report identifying serious concerns about Putnam County Hospital’s financial condition.

The Auditor also singled out HPI’s lab test billing process as highly questionable. Galloway referred to the process as a “scheme.”

Since the release of that audit, things have spiraled out of control at the hospital, leading to the lawsuit by Perez.

Perez claims he legally controls the hospital, and he rejects recent attempts by the board to keep him from running the facility.

Perez also claims that because he owns Putnam County Hospital, it is a private business. As such, he claims the Auditor’s office has no authority to conduct an audit. He is demanding that Galloway retract her prior audits and publish that retraction. He also insists that Galloway stay out of the hospital.

Galloway has previously stated that an application for change of ownership was never approved by the state, thus Putnam County still owns the hospital and her office still has the authority to conduct audits.

Perez is asking for damages in excess of $2 million.

Online court records don’t indicate when court proceedings will begin in the case.

As for the case in federal court, Anthem Blue Cross filed suit against Byrns, Perez and Hospital Partners in late March.

That suit is based on the 2017 Auditor’s report that HPI was using Putnam County Hospital as a front to charge Blue Cross for thousands of lab tests the lawsuit describes as fraudulent.

The case is particularly problematic for Putnam County. Because of the complicated relationship between HPI and the hospital, the taxpayers could find themselves on the hook for any damages awarded to Blue Cross.